US DOLLAR RECOVERS AFTER BULLISH COMMENTARY FROM THE FOMC

US DOLLAR RECOVERS

The US dollar index recovered early week losses after the FOMC Meeting Minutes showed that the Federal Reserve looked set to continue to hike interest rates. The Federal Open Market Committee meeting reinforced expectations for tighter US monetary policy, pushing the ten-year US Treasury-yield back towards seven-year highs. The FOMC Meeting Minutes revealed that September’s rate increase was unanimous amongst US policymakers and that there was a general agreement that further rate hikes for the US economy remained necessary.

If the EURUSD pair moves above the 1.1553 level, further upside towards the 1.1600 and 1.1650 resistance levels remains possible.

STERLING VOLATILITY HIGH

The British pound remained volatile against the US dollar this week, amidst mixed UK macroeconomic data and no clear resolution between EU and UK over Brexit negotiators. The UK economy posted better than expected Wage Earnings data, boosting expectations that the Bank of England may hike interest rates due to wage inflation. However, sterling later dipped below the 1.3100 support level, as Brexit negotiations reached a stalemate and the UK economy posted weaker than expected monthly CPI inflation and Retail Sales data.

The GBPUSD pair is bullish while trading above the 1.3100 level, further upside towards the 1.3258 and 1.3350 levels seem possible.

If the GBPUSD pair moves below the 1.3100 level, further downside towards the 1.3000 and 1.2868 levels seems possible

AUSSIE UNEMPLOYMENT BEAT

The Australian dollar rose against the greenback this week as the official Australian unemployment rate fell to five per cent, marking its lowest level in over six years. The Reserve Bank of Australia Meeting Minutes also showed that members remained concerned about worsening Sino-US relations, but policymakers continued to expect that the next interest rate change for the Australian economy would be up rather than down. The AUDUSD pair peaked around the 0.7160 level before settling back under the 0.7100 level, as GDP data from the Chinese economy showed growth slowing to 6.5 per cent during the third fiscal quarter of this year.

The AUDUSD pair is only bullish while trading above the 0.7240 level, further upside towards the 0.7288 and 0.7350 levels would then seem possible.

If the AUDUSD pair continues to trade below the 0.7240 level, further downside towards the 0.7000 and 0.6930 levels remains likely.

BITCOIN VOLATILITY COLLAPSES

Bitcoin recovered marginally higher this week but largely struggled to hold onto earlier gains as the world’s number one cryptocurrency continued to suffer from record low volatility. The broader cryptocurrency market had spiked higher in early week trade, largely erasing the former week’s losses but quickly settled back into narrow trading ranges seen earlier this month. Ethereum, the second largest cryptocurrency once again struggled around the $200.00 level, while Litecoin also failed to make meaningful gains above the $50.00 benchmark.

The BTCUSD pair is only bullish while trading above the $6,500 level, further upside towards the $6,700 and $6,838 levels would then seem possible.

If the BTCUSD pair trades below the $6,380 level, further losses towards the $6,000 and $5,800 support levels seems likely.